§ Statement of Purpose

The View from 1776 presents a framework to understand present-day issues from the viewpoint of the colonists who fought for American independence in 1776 and wrote the Constitution in 1787. Knowing and preserving those understandings, what might be called the unwritten constitution of our nation, is vital to preserving constitutional government. Without them, the bare words of the Constitution are just a Rorschach ink-blot that politicians, educators, and judges can interpret to mean anything they wish.

"We have no government armed with the power capable of contending with human passions, unbridled by morality and true religion. Our constitution is made only for a moral and religious people. It is wholly inadequate to the government of any other." John Adams, to the Officers of the First Brigade, Third Division, Massachusetts Militia, October 11, 1798.

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§ Decline of Western Civilization: a Snapshot

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Friday, November 14, 2014

Keynesian Statistics

From one aspect, Keynesian economics is about aggregating many very different kinds of economic data into single indexes. It is this which animates the Federal Reserve’s monetary policies, Congress’s stimulus spending packages, and New York Times propagandist Paul Krugman’s never-ending calls for increasing governmental deficit spending.

Mr. Stockman documents the greatly differing kinds of jobs - too many of them part-time - and widely varying incomes associated with those jobs that are rolled into one statistic for new jobs created each month. Obama administration spokesmen and the main stream media treat all reported new jobs as if they were parts of a homogenous statistic called employment.

Going back to the 1930s, when Keynes’s ideas first gained a foothold in the United States, we can understand why this simplistic view of employment pervades today’s discussions. Keynes notoriously promoted the idea that the only economic variable that counted was government spending to employ people. What those so employed did was, in Keynes’s view, immaterial. Hire men to dig holes one day, then fill them back up the next day, re-dig them the third day, and so on ad infinitum. At another time, in the same vein, he suggested burying money in bottles by one crew, then unburying them by the next crew.

In short, the vast complexity of an economy, ranging from mining and lumbering, to producing steel, cooper, and aluminum, to drilling for petroleum and natural gas, to production of manufacturing machinery, to railroads and trucking, to wholesale distribution, to retail stores, to software coding, to restaurants and schools, is looked upon by the Federal Reserve and by Congress and the administration as a single thing that can be controlled simply by the amount of deficit spending by the government and the amount of fiat money created by the Fed to fund deficit spending.

The record, as Mr. Stockman lays it out, shows that meddling by Congress and the Fed during recent decades has failed Keynesian expectations and, instead, made the employment picture steadily worse.